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An emerging U.S. natural gas developer, along with its $28 billion export project, has been rattled by the attempts of a potential major customer in India to probe the market for competing supplies, highlighting mounting pressure on sellers amid a global glut of the fuel.

India’s largest liquefied natural gas buyer, Petronet LNG Ltd., has started soliciting offers for supply under terms similar to a tentative agreement it signed with Tellurian Inc. last year, according to people with knowledge of the matter.

The Petronet tender, combined with the lack of a deal announcement that was expected during President Donald Trump’s visit to India this week, adds to doubts that Tellurian will be able to secure a sizable anchor investment from Petronet for its Driftwood LNG project, according to Michael Webber, managing partner of Webber Research & Advisory LLC.

“It’s supportive of our overall skepticism of the deal," he said.

The combined news spooked investors, sending Tellurian shares down 23%, the biggest one-day drop since January 2016.

The development highlights how a flood of new supply and record low spot prices are strengthening buyers’ hands and ramping up competitive pressure among sellers. Tellurian didn’t respond to requests for comment Wednesday. A Petronet spokesman didn’t answer calls seeking comment.

Petronet issued the tender to glean price and market information that it will use to back its position during talks with Tellurian, which are expected next month, as well as to justify to shareholders its final decision, one of the people said. The company’s main backers include state-controlled firms such as Oil & Natural Gas Corp. and GAIL India Ltd. Petronet Managing Director Prabhat Singh, who often speaks on behalf of the company, didn’t answer calls seeking comment.

For most LNG projects, locking up long-term sales agreements for the bulk of the production is a key requirement to secure financing. Tellurian Chairman Charif Souki said in late January that the company would finalize a deal with Petronet soon, and that it plans to make a final investment decision on the first phase of Driftwood in the “next couple of months" and break ground in the second quarter.

Under the preliminary non-binding deal in September, Petronet would buy as much as 5 million tons of LNG annually from the Driftwood project in Louisiana, which is slated to startup in 2024. The companies have been targeting a final deal by the end of March.

Webber said it’s possible Tellurian and Petronet could reach a scaled-back deal, which also earlier included Petronet taking a 18% stake in Driftwood.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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